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 and October 51. At least 10 million "bushels of com will be needed by corn processors 

 in the ccciing month. As in the previous program, local elevators purchasing com as 

 agents for the Commodity Credit Corporation will be required to sell 80 percent of 

 their com to designated industrial users. 



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It has been reported that farmers are planning to "hog down" lots of com 

 this year because of the shortage of labor. It is figured that this will cause a worse 

 maldistribution of corn during the coming year. Although profitable to the hog grower, 

 it will tned to prevent the shifting of more com to dairy cove and to commercial chan- 

 nels. The basic cause of the difficulty is the more favorable price received for com 

 when fed to hogs than when used for emy other purpose. ^ 



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Wheat. Wheat prices rose this week as a net result of sooie price stimulating 

 influences and one or two price depressing influences. Probably the strongest stimulant 

 was received from the action of the House Agricultural Committee at Washington in a 

 approving; a 100-percent parity floor for all war essential crops. Presumably this 

 would include the basic staples wheat, corn, cotton, and rice. Another stimulating 

 influence was the discontinuance of trading in wheat at Winnipeg. Presumably this left 

 an open short interest at Chicago by traders who had offset purchases of wheat at 

 Winnipeg by salos at Chicago. The fact that the Canadian Wheat Board set the initial 

 payment on wheat to producers at 35 cents above the original guarantee seemed to con- 

 vinoe the trade that wheat was in a strong position. Another factor has been the heavy 

 feeding of wheat as tended to reduce our surplus very substantially during the past 

 few months. On the other side of the picture, we have the flour ceilings which limit 

 the prices that the millers can pay for wheat and the possibility that the bill pending 

 in Congress sponsored by Representative Murray of Wisconsin may beccDi© law. This bill 

 would permit the importation of wheat from Canada by commercial concerns for three 

 months without the payment of Import duty. The Commodity Credit Corporation is now 

 allowed to import Canadian wheat duty free, but commercial firms cannot do so. Inas- 

 much as the country is not in a critical position with respect to wheat supplies, it 

 is doubtful that the federal government will be willing to permit a rise in wheat 

 prices which would force subsidy payments to flour millers in order to permit them to 

 pay higher prices for wheat and continue to sell flour at a price which would permit 

 no increase in the cost of bread to consumers. 



Butter — cold storage holdings . The critical butter situation is being brought 

 to the attention of consumers in the most forceful manner possible, that is, raising 

 the point value of butter. Under present circumstances, that is the only way to provide 

 for em equitable distribution of our restricted available supplies. That doesn't mean 

 that steps could not be taken which would increase production. The basic difficulty is 

 that it is more profitable to feed com to hogs than to dairy cows. As a result, our 

 output of dairy products has declined. Also, a larger fraction of the total output of 

 milk is being used as fluid milk. There can be no quarrel with this latter feature be- 

 cause the greatest value is obtained from milk when used as fluid milk. From the longe: 

 term point of view, however, it would be unfortunate for the dairy industry if domestic 

 needs for butter are taken care of by the use of vegetable fats, as will be the case if 

 sufficient quantities of butter arc not made available. 



Because of the large fraction of storage stocks of butter set aside for 

 government account, the increase of 52 percent in cold storage butter holdings, as 

 comparod with September 1, 19^2, is a poor basis for judging the domestic situation. 



